Rigetti Computing (RGTI -1.54%) stock posted explosive gains across 2024. The quantum computing company's share price closed out the year's trading up 1,449.4%, according to data from S&P Global Market Intelligence.

RGTI data by YCharts

Rigetti Computing stock saw massive gains in conjunction with some exciting developments in the quantum computing space. The company's share price also got a big boost thanks to bullish coverage from analysts.

Rigetti Computing stock surges on quantum computing excitement

After moderate pricing movement throughout most of last year, Rigetti stock absolutely took off in 2024's final quarter. Excitement surrounding quantum stocks started building in Q4 and was further accelerated after Alphabet's Google division announced major computing breakthroughs with its Willow chip on Dec. 9.

The quantum computing semiconductor was able to complete an advanced benchmark test in a short period of time. It's also reportedly solved a problem in quantum computing that causes error rates to increase as more qubits are added to a system.

The day after Google made its Willow chip announcements, Rigetti announced that it had entered into a partnership with Quantum Machines to use artificial intelligence (AI) to automate quantum computer calibration. The announcement highlighted the crossover potential between quantum computing and AI and helped spur even more excitement among investors.

Then on Dec. 20, Craig-Hallum published a note initiating coverage on Rigetti Computing with a buy rating and a one-year price target of $12 per share. The firm's analysts believe that the company has scaling advantages that could allow it to outperform its competitors and establish an early lead in the quantum computing space that paves the way for huge wins over time.

Why is Rigetti Computing stock sinking in 2025?

Following last year's massive gains, Rigetti stock has seen a dramatic pullback in 2025. Due to macroeconomic pressures and recent bearish comments from Nvidia CEO Jensen Huang, the company's share price is down 33% year to date, as of this writing.

Rigetti's share price lost momentum as investors became more risk-averse early in this month's trading. The stock also saw a huge sell-off after Nvidia's Jensen Huang stated that it was unlikely that commercially useful quantum computers will be ready within the next 15 years.

Thanks to Nvidia's forefront position in GPUs for advanced AI applications, Huang is one of the most influential figures in the tech industry -- and his forecasts carry a lot of weight among investors. Huang still believes that quantum computing can play a role in pushing AI forward, but his timeline for commercial applications for the tech could make it difficult for Rigetti and other relatively small players in the space to emerge as big winners in the category.

With a market cap of roughly $2 billion, the quantum-computing specialist is valued at roughly 126 times this year's expected sales. That's a highly growth-dependent valuation that sets the stage for volatility. If Rigetti can serve up significant tech breakthroughs or investors become more broadly bullish on quantum stocks, the company's valuation could soar again. But investors should move forward with the understanding that the stock is a high-risk, high-reward play in a speculative corner of the tech industry.